Correlation Between IMedia Brands and B Riley

Can any of the company-specific risk be diversified away by investing in both IMedia Brands and B Riley at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining IMedia Brands and B Riley into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IMedia Brands 85 and B Riley Financial, you can compare the effects of market volatilities on IMedia Brands and B Riley and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in IMedia Brands with a short position of B Riley. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMedia Brands and B Riley.

Diversification Opportunities for IMedia Brands and B Riley

-0.47

Correlation Coefficient

IMedia Brands  B Riley

Very good diversification

The 3 months correlation between IMedia and RILYZ is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding IMedia Brands 85 and B Riley Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Riley Financial and IMedia Brands is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on IMedia Brands 85 are associated (or correlated) with B Riley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Riley Financial has no effect on the direction of IMedia Brands i.e., IMedia Brands and B Riley go up and down completely randomly.

Pair Corralation between IMedia Brands and B Riley

Assuming the 90 days horizon IMedia Brands 85 is expected to under-perform the B Riley. In addition to that, IMedia Brands is 2.71 times more volatile than B Riley Financial. It trades about -0.11 of its total potential returns per unit of risk. B Riley Financial is currently generating about -0.02 per unit of volatility. If you would invest  1,768  in B Riley Financial on September 27, 2024 and sell it today you would lose (883.00) from holding B Riley Financial or give up 49.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	23.48%
Values	Daily Returns

IMedia Brands 85  vs.  B Riley Financial

IMedia Brands 85

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IMedia Brands 85 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, IMedia Brands is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

B Riley Financial

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in B Riley Financial are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, B Riley showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IMedia Brands and B Riley

The main advantage of trading using opposite IMedia Brands and B Riley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMedia Brands position performs unexpectedly, B Riley can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in B Riley will offset losses from the drop in B Riley's long position.

The idea behind IMedia Brands 85 and B Riley Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.